Despite the dire conditions, Vancouver’s biz has actually picked up a bit

For decades Vancouver’s hefty incentives have made the city a major shooting destination, especially for U.S. TV series. And lately the British Columbia metropolis has attracted a slew of vfx and animation companies, which have set up shop there to take advantage of tax breaks and the growing pool of local talent.

But not long ago it seemed that Vancouver was facing a significant production slowdown. Some companies closed, or, like Rockstar Games, left in pursuit of better incentives elsewhere. Execs were looking to places like Ontario, where vidgame developers can get up to a 40% tax credit compared to B.C’s 17.5%.

The province offers a 33% credit just on labor costs — while Ontario and Quebec offer a 25% tax credit on all production costs. Further, the harmonized sales tax, which combines the 7% provincial sales tax (PST) with the 5% goods and services sales tax (GST) levied by federal government, has been phased out, so the provincial portion is no longer refundable to productions.

Facing such threats, the industry banded together under Save BC Film to lobby the government for changes prior to the provincial elections.

“Literally thousands were out of work,” says Peter Leitch, chair of the Motion Picture Production Industry Assn. of British Columbia. “With the Liberal government re-elected, the credits remained at the same level. The industry was bracing for the worst.”

But despite the dire conditions, Vancouver’s biz has actually picked up a bit. Current numbers show that production is largely unchanged from last year’s levels, according to Richard Brownsey, CEO of Creative BC, a new agency that amalgamates the B.C. Film Commission and B.C. Film + Media. And 30 new productions are filming or about to start.

Recent news of Pixar Canada shuttering its Vancouver studio set off shock waves, but insiders believe this was less due to incentives and more a corporate Disney decision related to the delay of two Pixar films and the need to shift work back to Pixar’s headquarters. Says Nerd Corps Entertainment CEO Asaph Fipke: “Look, (parent company Disney) has ILM and Pixar here, so (why not move one) when they can still get the tax credit?”

Overall, the vfx/animation/post sector seems to be showing stability. Companies like MPC, Zoic, Scanline VFX, Image Engine, Atomic Cartoons, Bardel Animation, DHX Media, Gener8 and Nerd Corps are hiring. Given that Fipke’s company is about to engage 50 more workers, over the next few months, reaching a staff of 400, he’s confident predicting growth for TV animation. Gener8 CEO Rory Armes, whose company specializes in 2D-to-3D conversion, is looking to hire 80 people and is competing with other studios to get the talent.

Small fluctuations in tax credits are inconsequential for digital production, believes Fipke, insisting that when you net them out, the difference between those offered by B.C., Ontario and Quebec isn’t very big. “The PST is maybe a little bit of an issue,” admits Fipke, “but not enough for us to jump up and move the operation somewhere else.”